China and the United States vowed Thursday to work together to tackle the global financial crisis as they gathered for their last cabinet-level economic meeting under George W. Bush's administration.
US Treasury chief Henry Paulson said participants at the Strategic Economic Dialogue (SED) faced unprecedented challenges with a financial crisis that has battered the world since they last met half a year ago.
"For the first time during the SED, the US and China will focus on how we can work together through international forums to strengthen the global economic system," he said at the start of the two-day event.
"The SED has improved the relationship between our two countries so that we can effectively manage complex issues, such as the recent global financial turmoil."
The cabinet-level US delegation has come to Beijing after more data poured out of the United States this week showing the world's biggest economy is diving into the depths of recession.
With all eyes on China amid hopes it can maintain strong economic growth to cushion the global crisis, Paulson's counterpart in the meeting, Vice Premier Wang Qishan, expressed a similar sense of urgency.
"Jointly dealing with the international crisis is the most pressing task we are now facing," Wang said at the start of the talks, held in the Diaoyutai State Guest House in western Beijing.
"The current top priority is to... restore market confidence as soon as possible, to curb the financial crisis from spreading and to avoid overall global economic recession, and especially to limit the impact on developing countries."
The talks were taking place amid evidence that China is increasingly suffering from the crisis, with the World Bank predicting growth in the world's fourth-largest economy will hit a 19-year low of 7.5 percent in 2009.
Meanwhile, concerns are emerging abroad that China may freeze or even reverse currency reform in order to help its struggling export sector.
"China has appreciated the (yuan) over 20 percent against the dollar since 2005 -- this is important and significant, but it is important that the reform process continue," Paulson said in Washington before leaving for China.
Thursday morning, the yuan stood at 6.8838 against the US dollar, compared with Wednesday's close of 6.8830, after falling sharply early in the week.
Wang did not mention the yuan at his opening remarks Thursday, but urged the United States to make sure Chinese investments in the US economy were safe.
"We hope the US side will adopt every necessary measure to stabilise its economy and financial markets and ensure the safety of China’s assets and investment in the United States," he said.
At the end of September, China officially became the largest holder of US government bonds, owning 585 billion dollars' worth of Treasuries and overtaking Japan as Washington's top creditor.
China is spending a large part of its bulging trade surplus on buying US government debt, but criticism is emerging in Chinese academic and policy circles that this type of investment is not as safe as it used to be.
The Strategic Economic Dialogue, largely the brainchild of Paulson, has taken place twice a year since 2006 and is the highest-level forum for exchange between economic policy-makers of the two nations.
This round is the last under Bush's administration and his successor, Barack Obama, has not indicated whether the talks will continue on his watch.